Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.
What: This morning saw Man Group (LSE: EMG) (NASDAQOTH: MNGPY.US) leap up by more than 10% in early trading, after announcing improvements to its annual adjusted pre-tax profits of 8%, as well as a $115m share repurchase buyback programme.
So what: Well, this increase (to $297m in 2013 from $275m in 2012) came alongside a return to profitability in statutory pre-tax profit: last year, Man Group posted a loss of $748m, while this year it crept into the black with a positive figure of $56m.
All of this came despite funds under management decreasing by 5% to $54.1bn — around £32.5bn — but there were encouraging signs as clients continued to add money for the second successive quarter — previously, Man Group had seen eight successive quarters where clients withdrew from their funds.
Now what: It’s fair to say that 2013 wasn’t Man Group’s finest year, following a dramatic plunge at the beginning of summer. As the chart shows, each sign of recovery has been followed by another fall, so the question investors will be asking themselves is whether the company will be able to maintain this latest spike.
Many will be encouraged by today’s news of a final dividend equivalent to 5.3 cents a share, bringing the annual total to 7.9 cents — around 3.2p per share — and presenting investors with a FTSE 100 average-beating yield of 5.6% at current prices.
